Short Term Trading Week Starting: 15 Jan

Originally posted by lifeguard22 ↑

Re: Lithium sentiment. Hmm. I think this is a short term correction, partly because of the negative press, but also because of the unsustainable gains across the sector over the last two weeks in particular.

I’m happy to argue against the conveyed sentiment of bigger players (inc Maq bank and that article in the AFR) about trends in the industry. They’ve made (well orchestrated, and profitable?) mistakes before and I’m sure they’ll make such mistakes again.

Please note: I can’t argue my position with complete impartiality because my portfolio is disproportionately weighted with lithium stocks. However, I’d like to think that my sentiment is guided by certain macro-level trends that are playing out at the moment, rather than a desire for profit.

I’ve mentioned these catalysts on a number of occasions before:

- Governments around the world adopting a pro(only!)-EV stance
- car manufacturers announcing the end of ICE vehicle production
- rising EV sales figures
- Buses and heavy vehicle conversions happening at a rapid rate
- Tesla’s market-stoking announcements

And an interesting question to consider: Why would the Chinese (in particular) be investing hundreds of millions of dollars in certain companies, strategic infrastructure and industrial re-fits if the (near-term or projected) demand wasn’t there?

My opinion, given all the variables at play, is that the next few years will be marked by high levels of raw material demand, hampered by a slowly rising level of supply. I project that by late 2019 we will see supply start to catch up and so around that time, with increasing efficiencies and tech improvements, we’ll see the spot price fall (some are predicting it will halve by 2021).

So that’s my thinking as to why this is only a short-term correction and why we should see a generally bouyant sector as the year progresses.

So. I may not be completely impartial, but I do have a lot less to gain than those who may very well be deliberately spreading fear in the market place, so that they can take established positions at a lower level (thereby ensuring their end-of-year bonuses when the ‘unexpected’ turn-around happens later this quarter). That may be overly cynical, or stunningly accurate - time will tell.

General advice: near-term producers are your safest bet either way, so consider any Li stock with time-to-ship in mind. When can they dig the product out of the ground (or for brine, when can it be evaporated and processed)?

Thanks all.

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There maybe some sort of correction but imo we don't have enough lithium to supply 20-30% ev market penetration.

Here are the numbers:

Current global new car sales: 100 mill pa

At lest 5 Countries have put a plan to end fossil fuel cars by 2040

China being one of them and has 40 mill new cars sold pa

So let's say to reach there goal of no fuel cars, market penetration would need to be at lest 10% by 2022 and grow from there.

10 mill EV's would also need 20% of batteries keeped as spare parts.

12 mill x 42kg of ltc per car ave = 504 mill of ltc x ratio of mine product to ltc at 1:8 = 5 billion kg a year needed or 500 k ton of lithium to be mined.

The number's stacks up.. this not hype. I haven't included any commercial cars , trucks ect ( have a look at BYD busses ). my prediction is also not only home batteries will grow, but most of your products at home will end being cordless, ie kettle, mower, hairdryer ect.. the avarge home will have about 1 kg of ltc in products now with phones tablets computers ect..

Pull backs will come and go as people like profits but this story is still in it's infancy and we are going to need a shit load more of lithium.

Finally, when i called in 2016 that we would have a major li run towards mid to late 2017 as supplyers would want to lock in what they canget there hands on, i simply was forward looking..

And that's what the market is doing in Li.. looking forward